Working seniors to get just reward with passage of Social Security bill

Published: Saturday, April 08, 2000

WASHINGTON {AP} Hundreds of thousands of Americans age 65 through 69 will be able to earn as much money as they want without losing Social Security benefits under a bill signed Friday by President Clinton repealing a Depression-era penalty.

The elimination of the so-called earnings test will mean a bonanza averaging an additional $6,700 in payments this year for some 800,000 recipients who are working and another 100,000 who haven't sought benefits because they have jobs, the Social Security Administration says.

In addition, the repeal was retroactive to Jan. 1, meaning that about 415,000 seniors who lost Social Security benefits this year will receive a refund. It will average $3,500 and be mailed out in May.

"Conventional wisdom says that nothing important happens in Washington in an election year," Clinton said at a ceremony Friday. "Today we have proved the conventional wisdom wrong."

The measure repealed a law in which people age 65 to 69 lost $1 in Social Security benefits for every $3 in wages above an annual limit of $17,000. The cost of the repeal was estimated at $22 billion over 10 years.

The earnings penalty was a remnant from an era of high unemployment when policy-makers wanted to encourage older Americans to retire and make room for younger workers.

But today's booming economy and tight labor market have changed the picture. Clinton said the repeal would benefit workers and companies alike.

"It means companies with labor shortages will have a fresh supply of experienced workers, increasing our ability to grow without inflation," Clinton said. "In the future, it will mean more baby boomers working longer, contributing more to the tax base and to the Social Security trust fund."

With Democrats and Republicans both eagerly courting the senior vote, the repeal sailed through Congress without dissent, approved by a 100-0 vote in the Senate and by 422-0 in the House.

"Common sense has finally prevailed," said House Speaker Dennis Hastert, R-Ill. "For too many years, America's working seniors have been getting penalized. Starting today they will get the paycheck they deserve."

Clinton said that one in four Americans between 65 and 69 has at least a part-time job, and that 80 percent of the baby boomers say they intend to work past 65.

Social Security is the largest federal benefit program, sending checks to 44 million Americans.